Over the past few years, there’s been a steady rise in the inclusion of anti-bias clauses in construction contracts with the clauses appearing either in the base subcontract agreement or as a flow-down provision from the prime contract. So, what are anti-bias clauses and why are they important? And what impact, if any, will President Trump’s recent executive order terminating diversity, equity, and inclusion (“DEI”) initiatives have on this?
Anti-Bias Clauses
Likely a response to combat jobsite racism, sexism, and harassment, anti-bias clauses, or non-discrimination clauses, first started appearing in federal and state public project contracts. Private owners have also started requiring these clauses, especially major corporations with strong DEI efforts. While equal opportunity clauses serve to prevent discrimination in the hiring process, anti-bias clauses serve to protect against discrimination on the jobsite (both internally within one’s own company and externally through communications and interactions with the other trades on site). Most anti-bias clauses seek to prevent jobsite discrimination and harassment based on legally protected classes such as race, gender, sexual orientation, disability, and pregnancy to name a few.
Large general contractors who work in these sectors have begun incorporating these clauses into their standard form subcontracts. However, even if such a clause does not appear directly in your subcontract, subcontractors may still be bound to the same through a flow-down requirement from the prime contract.
It’s important to be aware of these clauses because most are typically accompanied by zero-tolerance policy language. Generally speaking, anti-bias clauses will be binding and enforceable, and in most cases, especially with zero-tolerance policy language, a violation could be deemed a breach of contract exposing you to potential termination for cause (and all the damages that would flow from termination).
Further, implementation of an anti-bias clause may require proactive steps be taken by the subcontractor in order for the subcontractor to show how its complying with the clause and combatting against discrimination. For instance, the anti-bias clause may require that the subcontractor have its own workforce sign an anti-harassment policy, however, subcontractors must be aware that in this instance, any of their employees who refuse will then likely need to be removed from that project.
Similarly, anti-bias clauses may give the general contractor and/or owner the right to control how a subcontractor staffs the project, in that the contractor and/or owner may have the right to terminate a subcontractor’s employee or remove the same from the site, if, in the contractor or owner’s discretion, the employee violated the anti-bias clause.
It’s also critical to review the indemnification clause to see how these anti-bias clauses may affect that liability as well.
While anti-bias clauses are important to promote a safe, diverse, and equitable jobsite and workforce, they may come with added liability. These clauses should be carefully reviewed and compared to your own anti-harassment policy to ensure full compliance with all contractual requirements. If you don’t already have non-discrimination policies and/or workforce training implemented, it may be a good time to address the same as these anti-bias clauses become more commonplace in the industry.
Anti-Bias Clauses in the Wake of Anti-DEI Executive Orders
It’s important to remember that while the recent executive orders attack DEI initiatives, federal and state anti-discrimination laws are unaffected and still govern. So, while anti-bias clauses may have grown out of DEI efforts, these clauses will not likely disappear. However, the clauses are likely to be pared down to focus only on state and federally protected discrimination, especially in contracts for public projects and those projects reliant on federal funds.
Contractors will have to find a balance between complying with nondiscrimination laws and not violating these anti-DEI orders. Contractors working on public projects, or accepting government funds, should review and make changes to their compliance programs to ensure compliance with these new orders.
